Understanding the Recent Nifty Candlestick Patterns — Bearish Signals in Sight?

The Indian stock market has been showing interesting candlestick patterns over the past few sessions, providing valuable clues for technically inclined traders. Let’s unpack what’s happening and what these patterns might indicate for market direction in the coming days.

Candlestick Review:

1 Friday, 27th June 2025

A solid green candle, reflecting bullish sentiment, suggesting a continuation of the ongoing uptrend.

2 Monday, 30th June 2025

The market reversed with a large red candle, completely engulfing Friday’s green candle.
This is a classic Bearish Engulfing Pattern — a strong reversal signal, particularly when it appears after a sustained uptrend. It indicates that sellers have taken control and could push prices lower.

3 Tuesday, 1st July 2025

A Doji candle formed — where the opening and closing prices are almost the same. This Doji acts as an inside bar because its high and low fall within the range of the previous day’s candle.

In technical terms:

It resembles an Inside Bar Doji, suggesting indecision in the market.
Technically, this could have been a Harami Cross (a small Doji within a larger candle’s range) — but traditionally, this pattern should appear in a downtrend following a large red candle. Since the prior trend was up, this doesn’t qualify as a textbook Harami Cross.

Key Indicators to Watch:

While this cluster of candlesticks points towards a potential bearish setup:

The price is still above crucial moving averages (like 13 EMA and 26 EMA).
A breakdown below these averages would increase the probability of a short-term correction.

What’s Next?

The market is at a crucial juncture:

If prices break below Monday’s low, expect further downside.
If bulls defend the levels and move above Monday’s high, the uptrend might resume.

Traders should stay cautious, watch for confirmation, and manage positions carefully in either direction.

By Saurabh Jain

This content is for educational and knowledge purposes only and should not be considered as investment or Trading advice. Please consult a certified financial advisor before making any investment or Trading decisions

Latest Course

Latest posts

10 Sep, 2025
Resumption of US-India Trade Talks: What It Means for the Indian Market
10 Sep, 2025
China's Economic Slump and Its Implications for the Indian Market
09 Sep, 2025
Automakers Slash Prices Ahead of Festive Season Post-GST Reduction
08 Sep, 2025
Trump’s Tariffs Could Reduce India’s GDP by 0.5%: Implications and Strategic Responses
08 Sep, 2025
Trump's Escalating Sanctions on Russia: Implications for India's Economy

Our Recent FAQS

Frequently Asked Question &
Answers Here

Q1. What is a Bearish Engulfing Pattern?

A Bearish Engulfing is a two-candle pattern where a large red candle completely covers the body of the previous green candle. It signals a potential trend reversal when it appears after an uptrend

Q2. What is a Doji and why is it important?

A Doji occurs when the opening and closing prices are nearly the same, reflecting market indecision. It’s often seen as a potential turning point, especially when appearing after strong trends.

Q3. What is a Harami Cross Pattern?

A Harami Cross involves a large candle (mother candle) followed by a Doji that lies within the range of the first candle’s body. It signals potential reversal or consolidation, typically appearing in a downtrend.

Q4. Is the current Doji a Harami Cross?

Technically no. While it resembles a Harami Cross, it’s formed after an uptrend and not a downtrend, which doesn’t fit the classical criteria for this pattern

Q5. What is an Inside Bar?

An Inside Bar is a candle whose high and low fall within the range of the previous candle. It suggests a pause or consolidation before a potential breakout in either direction

Q6. How should traders approach the market now?

Wait for confirmation: • A break below Monday’s low signals a bearish move. • A move above Monday’s high suggests bullish continuation. Use stop-loss orders and manage risk proactively.